On leaving Oxford she worked as a researcher for the Labour MP Phillip Whitehead. She worked in HM Treasury as a fast stream administrator holding many posts including on the Energy Desk, the Exchange Rate Desk, Central Budget Unit, Overseas Finance and finally she was the head of strategy. In 1990-1 she was seconded to the Office of the Czechoslovak Prime Minister to advise on their economic transition after the Velvet Revolution.

After the 2010 General Election, Goodman nominated Ed Miliband to be the leader of the Labour Party. After his victory she was appointed as opposition spokesman in Labour's Justice team with special responsibility for Prisons and Sentencing policy. In October 2011 she became Shadow Minister for Media. In this role she has campaigned for better child protection online. In October 2013 she was also given responsibility for Labour's Arts policy.

In May 2009 the Daily Telegraph revealed that Goodman had claimed £519.31 for use of a cottage in her own constituency on her expenses, and had submitted hotel bills dated two months prior to her becoming an MP.[5] Goodman argued that she was carrying out Parliamentary business when using the cottage and thus her claim was accepted, and the claim for the hotel stay - which was rejected - was a mistake.[5] She also claimed a £600 fee for advice from her management consultant husband.[6] Goodman pointed out MPs the independent Legg inquiry into MPs expenses had given her "an entirely clean bill of health and concluded that none of my claims required further explanation or clarification.”[6]

In June 2014, Goodman was invited to give a speech at the opening of a village fair at Ingleton, County Durham in the parliamentary constituency which she had represented for nine years.[7] During her speech, she praised the village for the beauty of its waterfalls and caves and for its connection with Arthur Conan Doyle. None of these features applied to the County Durham village, but were in fact references to the village of Ingleton, situated seventy miles away in North Yorkshire.[8] The speech reportedly "baffled" the audience and after five minutes she was called away from the microphone and informed of her mistake.[7]